Argentina has three key resources that make a certain niche of investors lunge for their calculators: inexpensive land, cheap labor, and bumper crops of soybeans.

No, we're not talking about ideal conditions for a soy-milk venture. We're thinking bigger: a next-generation biodiesel plant. For starters, the timing is ideal.

The $15 billion global biofuel market is expected to triple by 2015, and one of the most promising niches to step into, experts say, will be refining and selling biodiesel fuel for trucks, buses, and other commercial vehicles in Argentina. Following Brazil's lead, the nation just passed a law mandating that biofuels account for 5 percent of all fuel sold by 2010.

Better than ethanol

Biodiesel is a renewable fuel because it's made by refining oil derived from plants like soybeans, palm trees, and rapeseed. Thinner than vegetable oil, biodiesel can power diesel engines without further conversion. That gives it a big advantage over ethanol, which burns in standard gasoline engines only when it's blended with petroleum.

The first significant player in this market just emerged: Imperium Renewables, a Seattle startup, will soon begin building a biodiesel refinery in Argentina that CEO Martin Tobias says will produce 100 million gallons of fuel per year. That, for comparison's sake, is more than the entire U.S. output in 2005.

While the VC-backed plant will cost about $50 million to build and takes 50 people to operate, clean-tech experts consider the Argentine biodiesel market wide open to smaller players. In fact, newer off-the-shelf technology that's currently being commercialized will lower plant construction costs to about $3 million, a far more digestible sum for angel investors.

Micro-refinery

It's possible to go even smaller. Tobias's Argentine refinery - to be situated near a major city, which he declines to name - makes sense because the number of customers within a small radius means minimal shipping costs. But Argentina's farmers account for about 75 percent of the country's diesel consumption; entrepreneurs can apply the same sell-local principle by building micro-refineries in rural areas.

Last year Edmundo Defferrari, an industrial engineer, built a prototype of such a plant 145 miles west of Buenos Aires for just $150,000. It already produces 130,000 gallons of biodiesel a year and requires human labor only to load the plant with soybeans and turn it on. Defferrari sells fuel to local farmers for 95 cents a gallon, about two-thirds the cost of regular diesel. It's a virtuous circle: His customers grow the soybean feedstock that he puts into his machinery.